This Was Intentional

In an episode of the popular 90s sitcom “Seinfeld”, Elaine suffered an injury to the neck. Kramer insists on helping her. Jerry joked, “His formal training is in pediatrics.” Not surprisingly, Kramer’s treatment ended up doing more harm to Elaine.

Bruce Bartlett has had a hand in developing the economic policy of the nation over the past three decades. In 1977, Bartlett went to work for Congressman Jack Kemp as a staff economist. He helped to draft the Kemp-Roth tax bill that eventually became the basis for Ronald Reagan’s 1981 tax cut. In 1983 he became executive director of the Joint Economic Committee of Congress. In 1987 he became a senior policy analyst in the White House Office of Policy Development. During the administration of George H.W. Bush he was deputy assistant secretary for economic policy at the Treasury Department.

Just as Kramer had no formal education in chiropractic medicine, Bruce Bartlett has had no formal education in economics. He majored in history. His master’s thesis was on the attack at Pearl Harbor. He obtained his knowledge of economics from listening to politicians and reading bumper stickers. And not surprisingly, his policy recommendations have done more harm than good.

In chapter 6 of his latest book, The New American Economy, Bartlett describes the “starve-the-beast” political strategy. It was believed that “tax cuts would channel concerns about budget deficits into political pressure to cut spending”. This idea had a lot of support, not just from political hack pop-economists like Bartlett but by none other than Milton Friedman himself who is quoted by Bartlett, “I have concluded that the only effective way to restrain government spending is by limiting government’s explicit tax revenue.”

In my opinion it’s a cop-out. Rather than roll up your sleeves and fight against overspending, they devised this method. It stems from weakness and cowardice.

This strategy was embraced by many over the years including Greenspan, Rick Santorum, Stephen Moore of the Club for Growth, President George W. Bush,William A. Niskanen, a member of Reagan's Council of Economic Advisers, and Richard Cheney. Barlett writes, “Instead of being viewed as the height of fiscal irresponsibility, cutting taxes without any corresponding effort to cut spending was now seen as the epitome of conservative fiscal policy.”

And it didn’t work.

Despite thirty years of outrageous budget deficits and a growing and growing and growing national debt, no significant spending cuts were ever implemented. Even when Republicans controlled the House, the Senate, and the White House, spending rose including the outrageous Medicare prescription drug benefit. Few made any effort to control spending.

We are faced with a national debt approaching 100% of GDP, and that national debt is dwarfed by continually rising unfunded Social Security and Medicare obligations. We are in a fiscal hole so deep that it will take generations to get out of. And it was all intentional.